A man rides an escalator past an electronic screen at the Singapore Exchange Ltd. (SGX) headquarters in Singapore

All You Need To Know Going Into Trade On Feb. 15

Asian stocks retreated from the highest levels since October following a dip in U.S. equities as economic-growth concerns resurfaced and investors questioned the potential for progress on U.S.-China trade.

Shares in Japan and Korea bore the brunt of the early losses, while futures on the S&P 500 Index dipped. The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, little changed at 10,797 as of 7:15 a.m.

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BQ Live

Also read: Pakistan Rejects Link to Pulwama Attack That Killed 37 CRPF Jawans

Here’s a quick look at all that could influence equities today.

U.S. Market Check

  • U.S. stocks edged lower in listless trading as disappointing economic data and reports the president will declare a national emergency overshadowed news that another government shutdown will be averted.
  • The yield on 10-year Treasuries held at 2.65 percent after sinking five basis points Thursday.

Also read: U.S.-China Trade Teams Far Apart on Reform Demands, Sources Say

Asian Cues

  • The MSCI Asia Pacific Index dropped 0.4 percent.
  • Japan’s Topix index retreated 1.2 percent.
  • South Korea’s Kospi index fell 0.9 percent.
  • The S&P 500 Index fell 0.3 percent.
  • Hang Seng futures dropped 0.5 percent earlier.

Also read: Drip. Drip. Asia’s Liquidity Taps Start to Gurgle

Commodity Cues

  • Brent crude rallied for the third day, ended 1.5 percent lower at $64.57 per barrel.
  • West Texas Intermediate crude rose 0.8 percent to $54.85 a barrel.
  • Gold gained less than 0.1 percent to $1,312.80 an ounce.

Also read: Anglo Trims Platinum Goal as 2018 Output Contains Few Surprises

London Metal Exchange

  • Copper ended higher for the second day, up 0.2 percent.
  • Aluminium ended lower for the seventh day, down 0.54 percent.
  • Nickel ended lower for the fifth day, down 1.65 percent.
  • Lead halted a three-day decline, ended 0.84 percent higher.
  • Tin resumed declines after a one-day rally, ended 0.95 percent lower.
  • Zinc ended lower for the fifth day, down 0.23 percent.

Indian ADRs

All You Need To Know Going Into Trade On Feb. 15

Stocks To Watch

  • Jet Airways agreed to give lenders a majority stake in the airline company by converting part of their debt to equity as the airline battles a cash crunch. The board, as part of a provisional resolution plan, agreed to allot 11.4 crore shares at an aggregate value of Re 1 to the lenders’ consortium led by State Bank of India.
  • CG Power Industrial Solutions board in principal has approved the proposal of the merger of arm ‘CG Power Solutions’ with the company. Final proposal will be provided in due course of time says the company.
  • Minda Industries approved the merger of Harita Seatings with company. Harita shareholders will get 152 Minda shares for every 100 shares held or four fully paid up preference shares of Rs 121.25 for every one equity share held.
  • Comcast, Sony in race to buy stake in Zee Entertainment. The companies might bid between Rs 540-Rs 560 per share for stake in the company. (CNBC-TV18)
  • J. Kumar Infra received order worth Rs 445 crore for Mumbai Metro Rail Project.
  • Siemens India said it will sell its leasehold interest in Gujarat property for Rs 193.5 crore to LM Wind Power Blades. The company said that this proposal in subject to receipt of statutory and regulatory approvals and signing of form agreements between both parties.
  • PNC Infratech arm received financial closure from NHAI for HAM Project in Uttar Pradesh whose bid cost was Rs 2,159 crore. The company said that after this financial closure (the seventh), no other financial closures were pending as on date.
  • Mangalore Chemicals and Fertilizers shut down Ammonia, Urea and ABC plants from Feb. 13 after reassessing capacity of Urea production for financial year 2019 as per Department of Fertilizers.
  • Kridhan Infra’s Singapore arm received construction order worth Rs 187 crore for a sports centre.
  • Glenmark Pharma approved to spin off the innovation business into a new company in the USA. This new company will focus on the areas of immunology, oncology and pain management.
  • EID Parry, Balrampur Chini, Dhampur Sugar: Government raised the minimum selling price of sugar by 6.9 percent to Rs 31 per kg from Rs 29 per kg with immediate effect. (Bloomberg News)

Data Watch

  • India January trade balance, estimates at $13.5 billion deficit, prior $13.1 billion deficit.
  • India January exports YoY, prior 0.3 percent.
  • India January imports YoY, prior -2.4 percent.

Earnings Reaction To Watch

ONGC (Q3, QoQ)

  • Revenue down 1.1 percent to Rs 27,694.1 crore.
  • Net profit flat to Rs 8,262.7 crore versus Rs 8,264.6 crore.
  • Ebitda up 5 percent to Rs 16,571 crore.
  • Margin at 59.84 percent versus 56.41 percent.
  • Net realisation to $66.38/bbl versus $73.07/bbl.
  • Declares dividend of Rs 5.25 per share.

Also read: Q3 Results: ONGC Profit Remains Flat But Beats Estimate

Jet Airways (Q3, YoY)

  • Revenue up 1 percent to Rs 6,148 crore.
  • Net loss of Rs 587.8 crore versus Net profit of Rs 165.3 crore.
  • EbitdaR down 54.3 percent to Rs 459.5 crore.
  • Margin at 7.5 percent versus 16.5 percent.

Also read: Q3 Results: Jet Airways Reports Fourth Straight Quarterly Loss

Nestle India (Q4, YoY)

  • Revenue up 11.4 percent to Rs 2,897 crore.
  • Net profit up 9.6 percent to Rs 342 crore.
  • Ebitda up 3.2 percent to Rs 550 crore.
  • Margin at 19 percent versus 20.5 percent.
  • Other expenses up 31 percent to Rs 809 crore.
  • Declares interim dividend of Rs 25 per share.

JK Tyre & Industries (Q3, YoY)

  • Revenue up 28.6 percent to Rs 2,730.8 crore.
  • Net profit up 2.5 times to Rs 26.7 crore.
  • Ebitda up 24.5 percent to Rs 265.1 crore.
  • Margin at 9.7 percent versus 10 percent.
  • Exceptional losses to Rs 20.5 crore.
  • Approves raising Rs 200 crore via preferential issue.

National Peroxide (Q3, YoY)

  • Revenue up 40.9 percent to Rs 98.2 crore.
  • Net profit up 79.2 percent to Rs 37.1 crore.
  • Ebitda up 74.5 percent to Rs 54.6 crore.
  • Margin at 55.6 percent versus 44.9 percent.

Deepak Fertilizers and Petrochemicals (Q3, YoY)

  • Revenue down 11.6 percent to Rs 1,453.4 crore.
  • Net profit down 77.6 percent to Rs 12.2 crore.
  • Ebitda down 29.1 percent to Rs 107.8 crore.
  • Margin at 7.4 percent versus 9.2 percent.
  • Finance Cost up 62 percent to Rs 57.2 crore.

Infibeam Avenues (Q3, YoY)

  • Revenue up 2 times to Rs 150.3 crore.
  • Net profit of Rs 26.6 crore versus Rs 1.9 crore.
  • Ebitda up 2.6 times to Rs 43.9 crore.
  • Margin at 29.2 percent versus 22.8 percent.

Mcleod Russel (Q3, YoY)

  • Revenue down 18 percent to Rs 456.2 crore.
  • Net profit down 20.6 percent to Rs 53.6 crore.
  • Ebitda down 88.9 percent to Rs 5.8 crore.
  • Margin at 1.3 percent versus 9.4 percent.
  • Decrease in inventory of Rs 180.8 crore.
  • Deferred tax reversal of Rs 33.2 crore.

Mishra Dhatu Nigam (Q3, YoY)

  • Revenue up 4.1 percent to Rs 153.2 crore.
  • Net profit down 36.2 percent to Rs 16.9 crore.
  • Ebitda down 43.4 percent to Rs 17.1 crore.
  • Margin at 11.2 percent versus 20.5 percent.
  • Raw Material Costs up 2.5 times to Rs 803.4 crore.

Glenmark Pharma (Q3, YoY)

  • Revenue up 15.9 percent to Rs 2,555 crore.
  • Net profit up 15.2 percent to Rs 107.7 crore.
  • Ebitda up 34.7 percent to Rs 434.6 crore.
  • Margin at 17 percent versus 14.6 percent.

Voltas (Q3, YoY)

  • Revenue up 8.5 percent to Rs 1,491.8 crore.
  • Net profit down 18.7 percent to Rs 80.9 crore.
  • Ebitda up 1.24 percent to Rs 115.7 crore.
  • Margin at 7.8 percent versus 8.3 percent.
  • Other Income up 2.6 times to Rs 54.8 crore.
  • Exceptional loss of Rs 12 crore.

MTNL (Q3, QoQ)

  • Revenue up 15.9 percent to Rs 514.5 crore.
  • Net loss of Rs 832.3 crore versus net loss of Rs 859.1 crore
  • Ebitda loss of Rs 330.2 crore.

Indiabulls Real Estate (Q3, YoY)

  • Revenue up 5.3 times to Rs 1,271.1 crore.
  • Net profit of Rs 202.5 crore versus Rs 6 crore.
  • Ebitda up 4.4 times to Rs 387.8 crore.
  • Margin at 30.5 percent versus 36.3 percent.

GSK Consumer Healthcare (Q3, YoY)

  • Revenue up 7.4 percent to Rs 1,116.8 crore.
  • Net profit up 35.1 percent to Rs 221.1 crore.
  • Ebitda up 14.8 percent to Rs 238.5 crore.
  • Margin at 21.4 percent versus 20 percent.

Kitex Garments (Q3, YoY)

  • Revenue down 7.6 percent to Rs 136.1 crore.
  • Net profit down 29.5 percent to Rs 12.4 crore.
  • Ebitda down 26.3 percent to Rs 25.5 crore.
  • Margin at 18.7 percent versus 23.5 percent.

Cox & Kings (Q3, YoY)

  • Revenue up 16.3 percent to Rs 1,331.1 crore.
  • Net profit down 69.6 percent to Rs 28.9 crore.
  • Ebitda down 8.8 percent to Rs 141.5 crore.
  • Margin at 10.6 percent versus 13.6 percent.
  • Other expenses up 91 percent to Rs 216.7 crore.

Shree Renuka Sugars (Q3, YoY)

  • Revenue down 37.9 percent to Rs 1,092.6 crore.
  • Net profit of Rs 68.6 crore versus net loss of Rs 2,294 crore.
  • Ebitda up 2.3 times to Rs 119.9 crore.
  • Margin at 11 percent versus 3 percent.
  • Exceptional loss of Rs 2,410 crore in base quarter.
  • Forex gain of Rs 86.8 crore.

GMR Infra (Q3, YoY)

  • Revenue down 5.5 percent to Rs 1,958 crore.
  • Net loss of Rs 561 crore versus Rs 578 crore.
  • Ebitda up 2 percent to Rs 487 crore.
  • Margin at 24.9 percent vs 23 percent.
  • Finance cost up 14 percent to Rs 719 crore.

Simplex Infra (Q3, YoY)

  • Revenue up 3 percent to Rs 1,403 crore.
  • Net profit up 17 percent to Rs 36.3 crore.
  • Ebitda up 2.5 percent to Rs 179 crore.
  • Margin at 12.7 percent versus 12.8 percent.

Bulk Deals

  • Automotive Axles: UTI MF sold 3.4 lakh shares or 2.25 percent equity at Rs 1,130 apiece.
  • Zee Media Corporation: IFCI sold 59.6 lakh shares or 1.27 percent equity at Rs 13.38 apiece.

Srikalahasthi Pipes

  • Promoter GK Investments acquired 5.39 lakh shares or 1.15 percent equity at Rs 157 apiece.
  • GMO Emerging Markets Fund sold 6.6 lakh shares or 1.4 percent equity at Rs 157 apiece.
  • Grantham, Mayo, Van Otterloo & Co. LLC sold 6.6 lakh shares or 1.4 percent equity at Rs 157 apiece.

Trading Tweaks

  • Coal India, Indian Energy Exchange record date for share buyback.
  • Ashapura Intimates Fashion, Mangalam Drugs And Organics, Cantabil Retail to move into short term ASM Framework.aa

Who’s Meeting Whom

  • Shriram Transport Finance to meet Public Sector Pension Investment Fund on Feb.15.
  • Container Corporation of India to meet Fiera Capital and Batlivala Karani Securities between Feb.15-20.

Insider Trading

  • Zee Media Corporation promoter Arm Infra and Utilities sold 11.1 lakh shares on Feb. 7.
  • Welspun Enterprises promoter MGN Agro Properties acquired 4.2 lakh shares between Feb. 11-12.
  • Alembic promoter group Nirayu acquired 42,000 shares between Feb. 12-13.
  • Nava Bharat Ventures promoter groups acquired 95,000 shares on Feb. 13.
  • RPG Lifesciences promoter Ektara Enterprises LLP acquired 25,000 shares between Feb. 12-13.
  • Muthoot Finance promoter and director George Alexander Muthoot sold 19,500 debentures on Feb. 11.
  • Godrej Agrovet promoter Godrej Industries acquired 49,000 shares between Feb. 11-12.

Money Market Update

  • The rupee on Thursday weakened for the second straight day before closing at 71.17/$ versus 70.80/$ on Wednesday.

F&O Cues

  • Nifty February futures closed trading at 10780, premium of 34 points.
  • Max open interest for Feb. 28 series at 10,900 Call, (open interest at 30.9 lakh shares)
  • Max open interest for Feb. 28 series at 10,800 Put, (open interest at 42.7 lakh shares)

Stocks In F&O Ban

In Ban

  • Adani Enterpises
  • IDBI
  • Jain Irrigation
  • Jet Airways
  • Reliance Power

New in Ban

  • CG Power
  • PC Jeweller

Out of Ban

  • Reliance Capital

Put-Call Ratio

  • Nifty PCR at 1.35 versus 1.29.
  • Bank Nifty PCR at 1.2 versus 0.72.
All You Need To Know Going Into Trade On Feb. 15

Brokerage Radar

On Nestle

CLSA

  • Maintained ‘Outperform’; cut price target to Rs 11,500 from Rs 11,950.
  • December quarter earnings were below estimates; displayed modest growth.
  • Step up in A&P should be a good strategy, but disclosure can improve.
  • Cut CY18-20 estimates by 4-5 percent on lower revenue and margin forecasts.

Macquarie

  • Maintained ‘Outperform’ with a price target of Rs 12,994.
  • December quarter earnings were below estimates on account of lower margin.
  • Domestic revenue growth was in line with estimates.
  • Believe higher A&P spend reflects confidence in demand environment, which is encouraging.

SBICAP

  • Maintained ‘Sell’; hiked price target to Rs 9,000 from Rs 8,525.
  • Quest to generate demand drives 16 percent earnings miss.
  • High base and margin headwinds to limit earnings show over the current and next year.
  • Price target hiked as rolled forward to March 2021.

On ONGC

UBS

  • Maintained ‘Buy’ with a price target of Rs 240.
  • Lower opex drives Ebitda beat; higher other income drives earnings beat.
  • No subsidy burden so far should allay concerns.
  • Expect investors to react positively.

Deutsche Bank Research

  • Maintained ‘Buy’; cut price target to Rs 187 from Rs 216.
  • December quarter review: Benefits from higher realization.
  • Beat due to lower other expenses and higher-than-expected other income.
  • Cut FY19-20 earnings estimates due to lower oil prices.

More Calls

JPMorgan on Lemon Tree

  • Maintained ‘Overweight’ with a price target of Rs 87.
  • Flat Revenue per room in December quarter’s due to new commissioning on new inventory.
  • Cost control drives strong margin performance.
  • Capacity addition plans broadly on track; Mumbai hotel delayed by couple of months.

Nomura on Ashok Leyland

  • Maintained ‘Neutral’ with a price target of Rs 123.
  • Financials benefited from merger of subsidiaries; benefit higher at net profit level due to lower tax rate.
  • Margin beat was a positive driven largely by a sharp improvement in gross margins.
  • Outlook remains weak as we expect the medium and heavy commercial industry to peak out in 2019-20.

Kotak on Capital Goods

  • Early signs of an inflection point visible in defence sector.
  • Defence is a long-term game; investors must be patient.
  • BEL: Initiated ‘Buy’ with a price target of Rs 100.
  • Cochin Shipyard: Initiated ‘Buy’ with a price target of Rs 555.

Goldman Sachs on Vodafone Idea

  • Downgrade to Sell from Neutral
  • Cut target price to Rs 20 from Rs 33
  • Says market share to remain at risk
  • Elevated leverage to hinder its ability to invest in Capex